How we saved a Hornsey family business £8,400 through restructuring
Client J runs a long-established Hornsey hardware and homeware shop trading as a Ltd company, with his wife working in the business full-time on the books and ordering. She was on a low PAYE salary with no shareholding, while Client J took all the dividends, meaning the family wasn't using both personal allowances and dividend bands efficiently.
We rebalanced. We brought the wife in as a 50% shareholder reflecting her genuine full-time involvement, set both directors' salaries at the NIC-optimal level, and split dividends to use both dividend allowances and basic-rate bands. We claimed the Employment Allowance against employer NIC on the shop's other staff and set up employer pension contributions for both directors as a further tax-efficient extraction.